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Wall Street’s sell-off resumed on Wednesday as a drop in the shares of large technology companies dragged stocks to their fifth decline in the last six sessions.
The S&P 500 fell more than 2 percent while the tech-heavy Nasdaq composite dropped 3 percent.
Apple, Microsoft, Alphabet and Amazon were all sharply lower. The tech giants had led a recovery in markets this year, lifting the S&P 500 to a record high early this month.
But stocks have been retreating since that Sept. 2 peak, as investors rotated out of the high-flying tech shares and concerns grew about the state of the economy. A key worry has been Washington’s inability to reach a deal on a new economic aid package, and the gridlock between Democrats and Republicans has only worsened since the death of Justice Ruth Bader Ginsburg last week.
U.S. stocks have already tumbled for three consecutive weeks and the S&P 500 is down nearly 10 percent from its Sept. 2 record. A drop of that size is deemed a correction, and is taken by some investors as a confirmation that a long-term retreat is underway.
Many analysts believe the death of Justice Ginsburg has made it all but impossible for Congress to pass additional legislation aimed at helping the economy. The fight over filling her seat will most likely take up most of the oxygen in Washington ahead of Election Day on Nov. 3.
“You’re not going to see anything coming from Washington that’s going to be even marginally productive between now and then,” said Doug Rivelli, president of the institutional brokerage firm Abel Noser in New York.
But economists, including the Federal Reserve chair, Jerome H. Powell, have repeatedly noted that spending by Washington is essential to shoring up the economy.
“The power of fiscal policy is unequaled, by really anything else,” Mr. Powell said during congressional testimony on Wednesday. “I think it’s likely that we’ll need more fiscal support.”
Mr. Powell pointed out that 11 million people haven’t gone back to work, and “there’s a long way to go.”“We need to stay with it, all of us,” he said. “The recovery will go faster if there’s support coming both from Congress and from the Fed.”
Shares of Tesla fell more than 10 percent, a day after Elon Musk, the company’s chief executive, said the company still had a lot of work to do to make cheaper, more powerful batteries for its electric cars.
Nike was the best performing company in the S&P 500. Its shares jumped about 9 percent, after the sportswear brand reported a surge in online sales.
Movie theaters, already starved for new Hollywood films to show, were handed new setbacks on Wednesday: Walt Disney Studios said it would hold off releasing several major films, including “Black Widow,” a Marvel superhero spectacle, and Steven Spielberg’s “West Side Story.”
Disney did not offer an explanation for the scheduling changes — eight in total, including the postponement of “Death on the Nile,” which had been scheduled to arrive in theaters on Oct. 23, and “Deep Water,” a thriller starring Ben Affleck and Ana de Armas. But the studio’s reasoning was obvious. Theaters in Los Angeles and New York, the No. 1 and No. 2 movie markets in the United States, remain closed and government officials have given no indication when they could be allowed to reopen. The coronavirus is surging anew in Europe. Theaters in Latin America remain closed.
And ticket sales for Christopher Nolan’s “Tenet” have been lackluster in North America, with movie executives saying that audiences are concerned about safety, even with capacity limits and mask requirements.
“Death on the Nile” was pushed back to Dec. 18. “Black Widow,” originally scheduled for release in May and postponed until Nov. 3, will now be delayed until May 3, 2021. “Deep Water” was rescheduled for release on Aug. 13, and “West Side Story” for Dec. 10, 2021.
The moves created a domino effect on Disney’s theatrical release schedule, with coming Marvel movies like “Eternals” and “Shang Chi and the Legend of the Ten Rings” getting pushed deeper into next year. “The King’s Man” shifted up slightly; it will now be released on Feb. 12 instead of Feb. 26.
Disney and other studios have now moved all of their significant films out of October. Disney did throw theater owners a bone, however: “The Empty Man,” a low-budget horror movie, will arrive in theaters on Oct. 10 instead of Dec. 4.
Shares of Tesla fell more than 10 percent on Wednesday, after the company announced that it still had a lot of work to do to in its efforts to make cheaper, more powerful batteries for electric cars.
The innovations could cut battery costs by more than 50 percent and nearly double the distance the vehicles can travel, which could set the set the stage for the company to make a $25,000 electric vehicle three years from now, Elon Musk, the company’s chief executive, said at a presentation on Tuesday at the company’s California factory.
But Mr. Musk, who has a reputation for promising game-changing innovations that often take far longer than expected to materialize, said many of the advances were still works in progress.
The announcement appeared to underwhelm investors, who were hoping that Mr. Musk would announce a major technical breakthrough, after the company had heightened expectations by calling the event “Battery Day.”
Specifically, investors were expecting Tesla to unveil a “million mile battery” that would last a million miles or more, said Dan Ives, managing director of Wedbush Securities, a financial services firm.
“From a hype perspective, Battery Day was probably one of the most anticipated events in the Tesla story over the last three to four years, because batteries are the heart and lungs of the Tesla growth story,” Mr. Ives said. “With no million-mile battery announcement, investors still left the event hungry.”
Tesla’s stock fell more than 5 percent on Tuesday before the event after Mr. Musk tried to temper expectations, writing on Twitter on Monday that the battery announcement would affect long-term production of Tesla’s vehicles.
The company is piloting production of batteries at its car factory in Fremont, Calif., and plans to build a cathode production plant somewhere in North America, Mr. Musk and Drew Baglino, senior vice president of powertrain and energy engineering, said at the event.
Jerome H. Powell, the Federal Reserve chair, faced lawmaker criticism over the central bank’s program to backstop the corporate bond market, as House Democrats questioned whether the central bank has done enough for smaller companies and workers.
“The Fed must use its tremendous resources and market power not just to bail out wealthy stockholders, but also to protect lower-income workers and struggling small businesses that are the backbone of this country’s economy,” Representative James E. Clyburn, Democrat of South Carolina, said during a House hearing on the coronavirus crisis.
The Fed rolled out a variety of programs in March and April to keep markets functioning smoothly as pandemic fears choked off the flow of credit, unveiling never-before-tried programs that buy corporate bonds, municipal debt and support loans to midsize businesses. Those efforts have met with varying degrees of success.
The Fed has been buying already-issued corporate bonds, and though those purchases have slowed, the simple presence of a backstop has helped the market.
“The larger companies that have access to the bond market — that market was closed down in February and March,” Mr. Powell said in his testimony, adding that the program has worked by serving as a backstop that coaxed the market back to life, allowing companies to fund themselves and keep their workers employed.
“These are very large companies,” he said. “Their businesses were severely affected by the pandemic, and our actions were in no way an attempt to relieve pain on Wall Street.”
The central bank’s programs to help state and local governments and its business loan effort — called the Main Street program — have come under fire, in part because neither have been heavily used. Those efforts were created in conjunction with the Treasury Department, which is backstopping them using money from a $454 billion pot of congressionally appropriated funds — much of which has not been used, another point of frequent criticism. Commentators have criticized the Fed and the Treasury for being too risk-averse.
Fed officials regularly point out that municipal governments and smaller businesses are able to gain access to credit, and that their emergency lending facilities are meant to serve as backup options — not to stand in for private capital, if it is available.
“Banks are lending,” Mr. Powell said. “If the economy performs worse than we expect, then Main Street will be there to take on a heavier load.”
The Department of Justice on Wednesday provided Congress with draft legislation that would limit the measure that shields digital platforms like Facebook and YouTube from lawsuits over user content they host.
Under the proposal, platforms that intentionally ease the distribution of harmful activity would not receive the protections. And platforms that allow criminal content to stay up once they know it exists would lose the protections for that content.
The draft legislation is part of the Trump administration’s broader efforts to limit the reach of the legal protections for online platforms, known as Section 230 of the Communications Decency Act. Earlier this year, President Trump issued an executive order meant to push some federal agencies to make changes to the law.
The original law makes it more difficult to sue online platforms over the content they host or the way they moderate it.
On Wednesday, Mr. Trump will meet with Republican state attorneys general to discuss social media. He has attacked the tech giants over anecdotal examples of conservative content being removed from online platforms, in an appeal to his political base.
Online platforms and their representatives in Washington say the legal protections play a vital role in allowing free speech to flourish online and have been integral to Silicon Valley’s rapid growth.
Six months ago, New York’s financial industry abandoned its corner offices, conference rooms and trading floors almost overnight as the coronavirus raged across the city.
The industry’s return to office life, by contrast, has been shambolic, highlighting how the waning threat of the coronavirus in New York has done little to reduce uncertainty around when things will return to normal. With governmental guidance remaining nebulous, many Wall Street firms have made up return-to-office policies that reflect their business and their leaders’ philosophies.
Large banks, where face time and long hours are considered virtues, are generally urging workers to come back.
Many hedge funds, which attract more seasoned workers who can afford sophisticated workstations at home, are not.
Private equity firms and asset managers, which have a mix of workers and deal with both long- and short-term investments, appear to be taking a middle path.
For the most part, though, the finance industry in New York — which employs around 350,000 people — has embraced caution. Just 8 percent of the city’s 1.2 million office workers returned this summer, according to the Partnership for New York City, which estimates that since August, the number has ticked up to no more than 15 percent.
“Covid is effectively gone from New York,” said Jason Mudrick, who runs Mudrick Capital, explaining why he sees little reason to keep his 26 employees home. “I personally think that all my hedge fund colleagues who are not coming back until later are just taking it as an excuse to have a long summer vacation.”
Amid an increase in posts aiming at weight-conscious consumers quarantining at home during the pandemic, TikTok is banning ads for fasting apps and weight loss supplements and putting restrictions on body-shaming diet ads.
As the platform struggles to secure its future in the United States, it is also trying to fine-tune the advertising strategy it introduced less than two years ago. In a blog post on Wednesday, the company said it would crack down on ads that presented “problematic and exaggerated” diet and weight loss claims and promote a negative relationship to body image and food.
Using targeting features, TikTok said it would allow ads for weight management products to only reach users older than 18 (many of its users are far younger). The platform will also monitor ads that promote weight loss or weight management for exaggerated, irresponsible, or harmful claims.
Recently, TikTok users have chronicled TikTok ads that promote dieting products and intermittent fasting services during lockdown, noting that some spots had been viewed millions of times. Reports in Vice and Rolling Stone noted that similar ads, often directed at young girls, were also appearing on Twitter and Instagram.
TikTok said on Wednesday that it was working with the National Eating Disorder Association and would redirect certain searches and hashtags to the group’s help line. The company’s changes join other efforts to address body positivity, including a Danish television show that presents children with images of normal bodies.
“As a society, weight stigma and body shaming pose both individual and cultural challenges, and we know that the internet, if left unchecked, has the risk of exacerbating such issues,” Tara Wadhwa, TikTok’s safety policy manager, wrote in the blog post.
The Metropolitan Opera announced on Wednesday that it would cancel its 2020-21 season because of the pandemic, keeping it dark until next September. The decision is likely to send ripples through New York and the rest of the country, as Broadway theaters, symphony halls, rock venues, comedy clubs, dance spaces and other live arts institutions grapple with the question of when it will be safe again to perform indoors.
One of the world’s largest technology conferences has been rescheduled, the latest sign that businesses expect coronavirus to limit travel and large gatherings for the foreseeable future. MWC Barcelona, formerly known as the Mobile World Congress, will be held next year from June 28 to July 1, instead of the first week of March, said GSMA, the industry group that organizes the conference.
United Airlines said on Tuesday that it planned to take a Treasury Department loan provided under the CARES Act that was passed in March, joining American Airlines. United declined to provide further details, though it had been expected to borrow up to $4.5 billion. American is expected to borrow $4.75 billion. Delta Air Lines and Southwest Airlines, which were both eligible for similar loans, declined to take them.
Nike said demand from China and strong online sales helped bolster revenue in the three months through August. Revenue fell slightly to $10.6 billion, which was better than analysts had expected, while digital sales rose 82 percent, the company said on Tuesday.